Robust Rent Growth for Single-Family Homes Amidst Housing Affordability Challenges in Q2 2024
August 15th, 2024
Rentometer has published its second quarterly report for 2024, highlighting rent prices and trends for single-family rentals in the U.S. Our report focuses on prices for 3-bedroom single-family homes in 692 cities across the U.S. Notably, 41% of American renters live in single-family rentals, a preferred choice, especially for families. Below are the key takeaways from the report.
Key Takeaways
- Rent growth has remained robust throughout the second quarter of 2024, increasing by 4.2% compared to the first quarter of 2024 and 1.7% year-over-year (YoY).
- The average rent for three-bedroom single-family homes in Q2 2024 was $2,407 in the U.S., up 4.2% from Q1 2024.
- Single-family home rents in the Northeast (+10%) and Midwest (+7%) experienced the strongest yearly growth, while the Southeast (+2%) showed weaker growth, and Southwest (0%) remained flat.
- Among cities with a population of 250,000+, San Francisco, CA was the most expensive market, with 3-bedroom single-family rents averaging $5,501 in Q2 2024. It was followed by Irvine, CA ($5,123), Los, Angeles, CA ($5,002), San Diego, CA ($4,524), and Long Beach, CA ($4,337).
- Except for Boston, MA and Miami, FL, eight of the ten most expensive cities to rent a single-family home in the U.S. were in California.
- Columbus, OH experienced the largest yearly rent growth among cities with populations of 250,000 or more. Prices for 3-bedroom single-family rentals averaged $1,900 in Columbus, OH, up 12.6% YoY. It was followed by Lexington, KY (+12.0%), Indianapolis, IN (+11.8%), Virginia Beach, VA (+11.5%) and Chula Vista, CA (+11.1%).
- On the other hand, several large cities in the U.S. saw rents decline. Phoenix, AZ experienced the largest rent drop among cities with populations of 250,000 or more. Prices for 3-bedroom single-family rentals averaged $2,246 in Phoenix, down 9.4% YoY. It was followed by Washington D.C. (-6.4%), Austin, TX (-4.3%), San Diego, CA (-3.9%) and San Antonio, TX (-3.8%).
Apartment Rents Cool as Single-Family Prices Surge Nationwide
Rental price trends are diverging: apartment rents are stagnating, while single-family home rents continue to rise.
Apartment rent growth has slowed due to a surge in multi-family construction, leading to increased competition and lower rates. In 2024, new apartment units are expected to reach record levels.
In contrast, single-family rental prices are rising due to limited new construction and an ongoing affordability crisis in the home-buying market, which is pushing more people into renting, driving up demand and prices.
California: Home to Eight of the Ten Priciest Cities for Single-Family Rentals
In Q2 2024, San Francisco, CA ranked as the most expensive market for 3-bedroom single-family rentals among cities with populations of 250,000 or more, with average rents reaching $5,501. Irvine, CA, followed closely at $5,123, Los Angeles, CA, at $5,002, San Diego, CA, at $4,524, and Long Beach, CA, at $4,337.
Notably, eight of the ten most expensive cities for single-family rentals in the U.S. were in California, with Boston, MA ($4,289), and Miami, FL ($4,107) being the only exceptions.
Columbus, OH, Lexington, KY, and Indianapolis, IN See the Largest Rent Growth in Q2 2024
Columbus, OH, saw the largest annual rent growth among cities with populations of 250,000 or more, with prices for 3-bedroom single-family rentals averaging $1,900, marking a 12.6% year-over-year increase. Following closely were Lexington, KY, with a 12.0% rise; Indianapolis, IN, with an 11.8% increase; Virginia Beach, VA, up 11.5%; and Chula Vista, CA, with an 11.1% gain.
Conversely, several large U.S. cities experienced declining rents. Phoenix, AZ, recorded the largest drop, with 3-bedroom single-family rentals averaging $2,246, down 9.4% year-over-year. Other cities with significant declines included Washington D.C. (-6.4%), Austin, TX (-4.3%), San Diego, CA (-3.9%), and San Antonio, TX (-3.8%).
Rent Price Analysis in the Midwest
The average single-family home rent price in the Midwest region was $1,838, up by 5.9% since last quarter and 7.0% from last year.
Columbus, OH, experienced the largest yearly rent growth of 12.6% among cities with populations of 250,000 or more, followed by Indianapolis, IN (+11.8%) and Chicago, IL (+9.9%).
The full breakdown of rent prices across the Midwest region is presented below.
Rent Price Analysis in the Northeast
The average single-family home rent price in the Northeast region was $2,721, up by 7.8% since last quarter and 9.9% last year.
Pittsburgh, PA, experienced the largest yearly rent growth of 10.3% among cities with populations of 250,000 or more, followed by Queens, NY (+8.1%) and Jersey City, NJ (+5.8%).
The full breakdown of rent prices across the Northeast region is presented below.
Rent Price Analysis in the Pacific
The average single-family home rent price in the Pacific region was $3,603, up by 2.8% since last quarter and 4.0% last year.
Chula Vista, CA, and Anaheim, CA, tied for the largest yearly rent growth of 11.1% among cities with populations of 250,000 or more, followed by Fresno, CA (+10.5%).
The full breakdown of rent prices across the Pacific region is presented below.
Rent Price Analysis in the Rocky Mountains
The average single-family home rent price in the Rocky Mountain region was $2,493, up by 3.4% since last quarter and 3.6% last year.
Reno, NV, experienced the largest yearly rent growth of 9.8% among cities with populations of 250,000 or more, followed by Denver, CO (+9.7%) and Henderson, NV (+8.6%).
The full breakdown of rent prices across the Rocky Mountain region is presented below.
Rent Price Analysis in the Southeast
The average single-family home rent price in the Southeast region was $2,319, up by 3.7% since last quarter and 2.3% last year.
Lexington, KY, experienced the largest yearly rent growth of 12.0% among cities with populations of 250,000 or more, followed by Virginia Beach, VA (+11.5%) and Baltimore, MD (+8.9%).
The full breakdown of rent prices across the Southeast region is presented below.
Rent Price Analysis in the Southwest
The average rent price for a single-family home in the Southwest region was $2,154, up by 3.8% since last quarter and unchanged from last year.
Oklahoma City, OK, experienced the largest yearly rent growth of 7.4% among cities with populations of 250,000 or more, followed by El Paso, TX (+6.9%) and Mesa, AZ (+6.2%).
The full breakdown of rent prices across the Southwest region is presented below.
Methodology
The methodology that Rentometer used to complete our nationwide rent price analysis is as follows:
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Geography: SFR markets in 692 U.S. cities across six regions.
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Property type: 3-bedroom single-family rentals with all bathroom counts.
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Analysis: Rent data was analyzed year-over-year for Q2 2023 and Q2 2024.
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Data: Includes data collected and updated between April 1st and June 30th for 2023 and 2024.
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Exclusions:
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Cities with fewer than 25 new or updated rentals within any quarter were excluded.
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Rentals below $500 (minimum price) or above $10,000 (maximum price) were excluded.
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About Rentometer
Rentometer is a Massachusetts-based company that has been providing investors and real estate professionals with rental comps for over 15 years. Our company collects and analyzes over 10 million new rental records each year, which form the basis of our market reports.
For the past two years, Rentometer has closely tracked and reported on three-bedroom single-family home rentals. Single-family home rentals house 41% of the U.S. renter population, and three-bedroom single-family homes are a preferred option for many families and investors.
Rentometer was founded by two seasoned real estate entrepreneurs:
Mike Lapsley is a proptech veteran with over 25 years of experience in the rental housing industry. Prior to Rentometer, he was the CEO of RentGrow, a leader in automated resident screening systems, which was successfully acquired by Yardi Systems. Mike holds a BS in Business Management and Accounting from the University of Lowell.
Torrence C. Harder has over forty years of experience investing in entrepreneurial companies. He founded Harder Management Company, Inc., which has founded and ventured sixteen companies. Torrey holds a BA with Honors from Cornell University and an MBA with Honors from the Wharton School of the University of Pennsylvania.
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